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Barrick Gold Corp said on Friday it welcomed a court ruling ordering the Papua New Guinea (PNG) government to negotiate over a lease extension for the Porgera gold mine.

PNG Prime Minister James Marape said last week that the country would not grant the mine a 20-year operating extension due to environmental damage and social unrest.

The move came as the Pacific nation reviews the terms of resources projects in the country with a view to enlarging its share of the profit from its mineral riches.

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Barrick suspended mining operations last weekend, saying it needed to keep workers safe and did not have any formal notification of the decision or details around any transition.

PNG’s National Court on Thursday ordered both parties to negotiate before returning to court in a week on May 8, to report on the progress of talks, Barrick (Niugini) Ltd (BNL) said in a statement and local media reported.

“We look forward to the coming discussions,” BNL said. Toronto-listed Barrick and China’s Zijin Mining each hold a 47.5 per cent stake in BNL, the mine operator.

If talks between the parties fail to reach agreement, the court will appoint an accredited mediator to facilitate the negotiations, BNL said. The court ordered BNL to maintain the mine infrastructure and assets while negotiations continued.

Marape formally notified Barrick Chief Executive Mark Bristow that the lease would not be renewed in a letter dated April 28 and reviewed by Reuters.

Marape said his National Executive Council had recommended refusing to renew the lease and urged BNL to “to frame an exit strategy.”

The joint venture had run into opposition from local landowners and residents. Critics say the Porgera mine has polluted water and created other environmental and social problems, with minimal economic benefits for locals.

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The giant open pit and underground mine in PNG’s remote rainforest covered highland region began operations in 1990 and produced about 421,500 ounces of gold in 2018.

BNL has called the decision “tantamount to nationalization.”

Both miners have said they would pursue all legal means to protect their interests and recover damages, and on Thursday the Chinese partner, Zijin, warned that failure to renew the lease could hurt bilateral relations.

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